Zomato will now charge zero commissions from 70% of restaurant partners based on set of predefined criteria, as the fight between the Info Edge backed company and Bengaluru based Swiggy intensifies.Supraja Srinivasan | ET Bureau | Updated: September 19, 2017, 18:10 IST

Online restaurant discovery and food ordering platform Zomato is all set to strike off commission charges for restaurants that churn high orders for the platform in an aggressive move in its fight with Naspers-backed food delivery startup Swiggy.

"Some of these criteria include the number of orders you process with us on a weekly basis, and whether your customers are happy with your food and service," CEO Deepinder Goyal wrote in a blog post on Monday. The program could cover 70% of Zomato's 25,000 restaurant partner network in India.

Zomato currently charges 7% as commission fees from restaurants under its food ordering business, which does not include delivery and payment gateway charges.

Under this new program, restaurants that clock more than 50 orders, no commission fees will be levied while the platform fees charged will be inversely proportional to the number of orders ranging from Rs 799 all the way down to Rs 199 for restaurants crossing the 500 order mark on a weekly basis. It however plans to charge a commission of 2.99% along with a platform fee of Rs 99 for restaurants that clock less than 50 orders per week.

Swiggy's commission charges are pegged between 15-30% across different restaurants and value of orders on the platform, but include delivery and payment charges.

Swiggy clocks 4 million orders per month leading Zomato’s 3 million monthly order mark. Zomato has an higher average order value of Rs 430 which gives it an edge over competition, but at Rs 350 per order, Swiggy is not far behind on this metric.

The move to charge restaurants zero commission comes after Zomato said it has turned profitable across all 24 countries that it is present in.

"Our core advertising business in India, Southeast Asia, and the Middle East - the three key regions for us, is generating enough cash to cover for the millions of dollars of investments we are making into the rest of the regions, and our new businesses (like online food ordering, table reservations, Zomato Gold, Zomato Base, etc.)," Goyal wrote.

Over the past 18-24 months, Zomato has been on a rationalising spree having capped its annual operating cash burn by over 80% to Rs 77 crore.

This comes even as Zomato is in advanced talks to raise up to $200 million from Alibaba and its payment affiliate Ant Financial in a round that could see the firm being valued at $1.1 billion, ET had reported earlier this month.

The new commission structure comes as Zomato chalks out a market expansion strategy amidst rising competition in the food tech sector from global technology majors like Google’s Areo and UberEats.

"This is a long term initiative for us. We want to make sure that businesses which focus on great food and service make more money so that their offerings can become more affordable over time. That will help us and them expand the market significantly," said a company spokesperson.